In line with what Merkel hinted at early and appropriately early for the US close, the FT has just put out a headline with regard to a new set of stress tests (yes those ever-so-trustworthy self-inspected exams) to better understand the impact of a larger than expected Greek haircut. This makes sense given the market trading massively below prior stress test or PSI levels but perhaps the craziest thing is what this is supposed to achieve - remember its not so much Greece per se as the message that a restructuring sends to any and all indebted European nation...cue EUR at week's high levels?

European Union finance ministers have asked the bloc’s leading bank regulator to test the strength of Europe’s banks on the assumption of a big writedown on Greek sovereign debt.

The move, a tacit admission that the European Banking Authority’s two previous rounds of bank stress tests were not sufficiently robust, came as Angela Merkel, the German chancellor, said she was prepared to recapitalise her country’s banks if necessary. She suggested she wanted to discuss joint EU-wide bank support efforts at an EU summit in two weeks.

“We’re under the pressure of time and I think we need to take a decision quickly,” Ms Merkel said after meetings with the European Commission in Brussels.

According to senior officials involved in the process, the EBA has been instructed to provide a country-by-country breakdown of how much new capital banks would need in the event that Greece’s bonds were written down.

And so on.

This time the Stress Test will work, and Spock will be found, damn it Jim!

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Anything, no matter how stupid, that buys time si more then welcome! Right?!?! Yet, time, time for what? More looting? Guess YES! The only way to get tihis fixed it to kill the rich, which saint happening at least not voluntarily :)))!

Hair cuts my ass! I have yet to see a rich fuck take a write down on his "investment" voluntarily!

Michael Lewis (and especially Kyle Bass) are predicting either Germany is leaving the EU, essentially wiping out the EUR, or that Germany is going to impose its total will on EU bondholders (massive haircuts) after pounding PIIGS+France into complete austerity and financial reformation (good luck with that); either way, it's not a pretty picture that the future has in store for the global, and especially European, economies:

After adopting the euro, Lewis says, Greece borrowed huge sums of money to do things like run the world's most unprofitable railroad and pay people not to show up to their jobs.

"It's a corrupt enterprise," he says. "When a party came to power, they'd give away lots of goodies. You talk to, for example, Greek tax collectors and they say, 'Our job is to be bad at our jobs. If you're too good at trying to collect taxes from Greeks, you get fired.' You talk to people who work for the government, and people are pretty clear that they regard these jobs as basically sinecures. It's a horribly inefficient society, and the inefficiency has been encouraged by the financial markets."

And Greece wasn't the only country that hid its true financial state, Lewis says.

"This was not a one-off situation," he says. "You look at the financial crisis in Europe, and the fingerprints of American investment bankers are everywhere. The financial collapse encouraged the worst sort of behavior. At the same time they were making bad loans in the United States, they were encouraging the same sort of behavior at the government level in Europe. The basic problem was, historically the role of the financier was to vet risk and make sure risk was evaluated. That got perverted in recent times, and instead the financier helped disguise risk."

You self-obsessed pompous bastards should take a minute every so often and give a cyber-five to Tyler for the funny shit he writes. 'Stress-test III:The Search for Spock'. I snotted all over my keyboard when I read that...

Must see interview with Lewis on how grave the EU situation really is (two short videos)

Chorus: How grave is it?

It's pretty damn grave.

Watch these two videos interviews of Lewis on the EU crisis, and because they lay out the crisis in such easy to understand ways, try and think of a scenario where PIIGS+France+UK does not ultimately become Lehman*500 (or 1,000).

Oh yes and since after the last round banks were supposed to raise $2.3B (a tad shy of the $200B the IMF said they need and really shy of the $1T goldman said they needed) and haven't raised a penny, someone remind me what the point of the "Stress Tests" are.

I know, I know: So Goldman can call its clients and get them to pour capital into European banks that will all have naturally passed with flying fucking colors? And to move the ponzi market higher, if only but for another day?

Sorry for the Off Topic on the Greece Farce, Rumors, Lies & Innuendos (deja vu), but Robert Reich (whether one does or does not like him) has written an outstanding summary of the whos, whats, whys and others s's of the reason a bail out of Eurozone PIIGS+France+U.K. slop is really a bailout of....

....ta da!!!!! Wall Street!

The essential and quintessential guide to the what's really driving the EUROSLOPPIIGSFUK bailout (hint: Governments & citizens have almost no exposure to defaults; banks and investment firms like MS have MASSIVE exposure):

I don't think this bullshit is working anymore. A lot of smart money is shorting credit on every uptick. Considering the possibility of a bazooka, that's impressive. Is it on and it can't be turned off?

"remember its not so much Greece per se as the message that a restructuring sends to any and all indebted European nation.."

While I do agree, I can't help but wonder about what would happen if the European bankers work in an even more perfect unison with the Greek administration in order to impose even more inconceivably absurd austerity measures.

Because even if I do feel sorry for the investors who commited their capital in the most high-risk investments while maintaining their own non-risk environment attitude, I think that they can squeeze some more juice out of the completely dismantled and pillaged, to the point of totality, Greek corpse of a society.

Because I hear that some families can still afford bread and perhaps the ability of food refrigeration, and that the faint scent of a Democratic instituion still has a miniscule probability of resuscitation.

And of course all that gambling/speculation-derived wealth losses shant regenerate themselves.

"I still doubt, as I wrote in my Sept. 28 blog post, “Germany nudges Greece towards default”, that the ISDA could get away with calling the 50% haircut that is being discussed “voluntary”. That just strikes me as absurd, and what’s more, potentially devastating to CDS markets. CDS would come out looking like the Monty Python insurance salesman’s “never pay” policy."